European Private Company

What is it?

If substantial achievements have been attained in the development of the internal market for goods, there are other areas where companies still face serious problems. One of these is the entry barrier for companies, particularly SMEs with limited financial and personnel resources, that wish to set up Europe-wide company structures. The adoption of the Societas Europaeas (SE) allowing the creation of European-wide type of company was already a step in the right direction for this issue but it is essentially suited to the needs of large businesses. In 2008 the Commission presented a proposal for a Statute on a European Private Company (SPE). This new company form would enable SMEs to do business throughout the EU, aims to cut costs and encourage growth in this area.

Why is it important?

Although the vast majority of companies in the EU are SMEs, most legislation and administrative procedures do not distinguish on the basis of company size. As a result, a great number of SMEs often have to fulfil the same administrative requirements as Europe’s largest companies. This often creates a major entry barrier for small companies.

Our viewpoint

Among the measures we promote for improving the business environment for engineering companies we obviously support the creation of the European Private Company (EPC). In the essential requirements for the model of company statutes we proposed that an EPC must be as simple as possible to set up, with minimal bureaucracy and incorporation costs and a minimum level of capital which is not set too high.

How we’ve been engaged

Orgalime submitted a position paper calling for the simplifying of the legal environment for companies through the promotion of European Private Company development which we believe could be better adapted to the needs of SMEs. Unfortunately, in 2012, the project of the European Private Company still remains blocked in the Council, and is not progressing well. In February 2012 the Commission launched an online consultation on the future of European company law which included questions on SPE. The consultation showed that stakeholders were hesitant to continue the negotiations on this proposal, but at the same time keen to explore alternative measures. In June 2013 the Internal Market and Services DG launched a questionnaire on Single-Member Limited Liability Companies containing questions about the need for legislative action at the EU level, together with questions about its possible content and barriers that currently exist for companies that want to increase their presence in the Internal Market. Orgalime encouraged its members to participate in the consultation.